11-09-2012 03:48 PM
So I'm new to the boards here, and I'm wanting to actively pursue increasing my credit score. Anyway, I was hoping to get some answers to some questions.
Do closed accounts affect my FICO score in any meaningful way? Do they affect the "Length of Credit History" portion of my credit score?
Also, I don't really understand the length of credit history. Is it simply the age of my oldest account, or the average age of all my accounts?
So basically, my credit history goes back 11 years, and the oldest accounts on my credit report are student loans. These loans were deferred, and eventually closed. Now, in the next year or so, they are scheduled to be removed from my credit report (Experian report says 10 years after closing date).
Are these accounts currently affecting my credit score in a positive manner? Or are they pretty much neutral? When they expire off my credit report, will my score actually go down, because the new oldest account is younger?
Finally, one more unrelated question. Does the "High Balance" listed on each credit card account affect my score in any way? I have a number of accounts that say something like "Credit Limit $3000" and "High Balance: $9000". Well, of course, at the time I had such a balance, my credit limit was higher, but the CC company since lowered it. But in looking simply at these numbers, it appears that I was well above my credit limit, and so maybe it would think I am less worthy of credit and deserving of a lower credit score.
Any help with these questions would be greatly appreciated.
11-09-2012 05:01 PM
Closed accounts are still factored into your AAoA and length of history, for as long as they report. They can also impact your mix of credit, your payment history, revolving utilization if a balance and CL are reporting, your scoring bucket, among others.
AAoA aside, FICO looks at the age of your oldest acct and the age of your oldest account within each category (e.g. oldest revolving, oldest installment, oldest charge card, etc.).
If the SLs are positive, and if they are your oldest or among your oldest accounts, then it certainly has a positive effect on your FICO score. I've personally have lost points when my oldest accounts dropped.
"High Balance" only has a FICO impact if it is a charge card, and even then it only impacts certain FICO versions and not the newer ones. Per a CLD'd CC, it doesn't matter at all and lenders don't care (well, mine never did). In the age of CLDs, your situation is very common.